Indian offshoring services to go strong in 2008!
posted in Outsourcing News and Top Outsourcing deals |The latest study suggests that Indian offshoring is facing rapid growth globally. The trend in the Information Technology field is changing and now IT companies are shifting more towards overseas service providers. The study also suggests that IT companies globally are now seeking more help from Offshore Outsourcing Service providers.
In Information Technology, as far as overseas development services are concerned, countries like India, China, Russia, Philippines and many others are in demand. But among this list India is the leader for IT services, while China is on the second spot. Countries like Russia, Philippines and others are relatively growing and are new players for such overseas IT services.
India is now the ‘Center of Attraction’ globally for almost all types of IT services. Along with these IT services now India is in demand for call-centers, BPO (Business Process Outsourcing) and KPO (Knowledge Process Outsourcing) services.
Indian ITES players should feel happy as reports suggest that the US economic slowdown will increase demand for global services in 2008. But on the down side, the presidential elections next year could delay contract signing. This was revealed by NeoIT, the global management consulting firm in their latest report tracking the service trends for 2008.
It predicts the dollar will continue to weaken. So clients should expect to take more aggressive action that will include renegotiation or modification of contracts. Also, the US presidential election will lead to large companies to avoid announcing substantial agreements or employee reduction in 2008, to avoid any potential risk or negative publicity. This could lead to a backlog of unsigned agreements.
Moreover, the green outsourcing movement is expected to pick up momentum next year and move beyond its earlier hype. Service providers will take concrete steps to introduce environmental business practices and reduce their carbon footprint.
Global clients will turn to new countries as inflation and employee turnover in Indian cities like Bangalore and Pune will frustrate them. Talent shortage will push them to Tier-II within India, as well as Latin America, Eastern Europe and Asia. Markets, such as Canada, Brazil, Chile, Costa Rica and Mexico, will be among the new hot spots in providing sourcing solutions.
However, the study also predicts that moving operations to smaller cities will complicate matters for the clients.
The growing competition of global services will motivate vendors to strongly differentiate themselves. Vendors will focus on re-engineering their client processes and emphasising their ability to deliver tangible results.
The report suggests that software and IT will remain the strongest segment, but engineering will outpace BPO to become the second largest segment. Meanwhile, finance and accounting market will reach critical mass as processes and pricing become more standardised.
